Eddie Bauer’s Fate on Auction Block

A bankruptcy auction to determine the fate of apparel cataloger/retailer Eddie Bauer Holdings will be held today in New York. After the auction a judge will issue a final decision on July 22.

When Eddie Bauer filed for Chapter 11 bankruptcy protection last month in Delaware, company officials indicated they plan to sell most of their assets to private-equity firm CCMP Capital Advisors for $202 million; the sale is open to other bidders per bankruptcy law.

According to the Seattle Times, some interested companies participating in the auction have plans that would keep Eddie Bauer stores open, while other parties would opt to close the stores and sell online. CCMP, whose other retail investments include Cabela’s, Guitar Center, and 1-800-flowers.com, said it would continue to operate at least 250 of Eddie Bauer’s 370 North American stores and keep its management team, according to the newspaper.

Among the reported interested companies are New York-based Iconix, which owns and licenses such brands as Danskin, London Fog and Rocawear; and Golden Gate Capital, which paid Talbots $75 million last month for women’s clothier J. Jill. Eddie Bauer has also drawn a joint bid from Toronto-based private-equity firm Hilco Consumer Capital and Boston-based liquidator Gordon Brothers Group. Hilco and Gordon teamed up to buy Sharper Image, Bombay Co. and Linens-n-Things in the past two years, selling off their inventory and closing down stores.

At the time of the Chapter 11 filing, Eddie Bauer president/CEO Neil Fiske said in a statement that “a crushing debt burden left from the Spiegel bankruptcy combined with the severe, prolonged recession have left us with no choice but to look for ways to restructure the company’s balance sheet.” Former parent Spiegel had filed for bankruptcy protection in 2003; Eddie Bauer has been an independent company since 2005.

Eddie Bauer had $476.1 million in assets and $426.7 million in debt when it filed for bankruptcy protection. Founded in 1920, the company lost money in each of the past three years. It employs 7,700 people in the U.S., including several hundred at its Bellevue, WA headquarters, plus 933 in Canada.

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